Delivering on the Promise of the Affordable Care Act

University of California, San FranciscoPhilip R. Lee Health Policy Seminar

September 11, 2015

• Better Care• Healthier People• Lower Cost

How Covered California Makes the Promise Real:

Covered California’s Promise:

BEING AN ACTIVE

PURCHASER

OFFERING AFFORDABLE

PRODUCTS

EFFECTIVELY REACHING AND

ENROLLING CONSUMERS

ENCOURAGING THE RIGHT

CARE AT THE RIGHT TIME

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Major Changes to the Health Care System because of the Affordable Care Act

Before the Affordable Care Act Today

• Many consumers denied coverage by insurers because of pre-existing conditions.

• Guaranteed coverage for all — no screening or price differences due to health status.

• Many consumers with insurance bankrupted by gaps in coverage and annual or lifetime limits.

• Insurers are prohibited from setting lifetime limits on essential health benefits, such as hospital stays.

• Health insurance companies could cancel a plan if an individual omitted minor conditions by accident.

• Insurers are no longer allowed to re-examine a customer’s initial application to cancel, or “rescind,” their coverage due to unintentional mistakes or minor omissions.

• Insurers could remove young adults from their parents’ policies, leaving them uninsured.

• Dependent children up to age 26 must be offered coverage under a parent’s insurance plan.

• Children under 19 could be denied coverage because of a chronic condition.

• Insurers may not exclude children under the age of 19 from coverage due to a pre-existing medical condition.

• Medicaid only covered low-income children, pregnant women, elderly and disabled individuals, and some parents, but excluded other low-income adults.

• Medicaid covers all adults under 65 with income up to 133 percent of the federal poverty level.

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California Employer-based Coverage Source of Payment

Covered California Source of Premium Payment

Tax Credit

74%

Employer

62%

Enrollee

26%

Employee

19%

Tax Break

19%

Average Annual Family Premium and Tax CreditPremium — $7,027Tax Credit — $5,200

In addition to lower premiums, 60 percent of enrollees receive, on average, $1,200 a year to help pay for services at the point of care.

Note: pie charts reflect pricing of average household premiums. For average family premiums, scope of benefits and family size differ in the two populations. Sources: Pew Charitable Trust, MacArthur Foundation, and the Congressional Budget Office

Average Annual Family Premium and Tax BreakPremium — $17,580Tax Break — $4,012

Federal Tax Support Makes Health Care Affordable for All Americans

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States that have expanded Medicaid

States that have NOT expanded Medicaid

AS OF 2015

10.5MILLION

have coverage throughnewly expanded Medicaid

The Affordable Care Act has Changed Health Care in AmericaResidents in every state enrolled in exchanges have benefited from the protections granted by the Affordable Care Act, even though not every state expanded their Medicaid program

10.2MILLION

have coverage throughan exchange

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The Affordable Care Act has dramatically changed the health insurance landscape in California with the expansion of Medicaid, Covered California and new protections for all Californians.

Source: Data shown in above graph is from: California Health Benefits Review Program, Center for Medicare and Medicaid Services, California Healthcare Foundation and Covered California (May 2015).

Notes: Medicare recipients and other publicly funded insured are not included in the graph.1 http://www.commonwealthfund.org/publications/press-releases/2014/jul/after-first-aca-enrollment-period

The Affordable Care Act Has Changed Health Care in California

Cal

iforn

ians

, in

mill

ions

UNINSURED

EMPLOYER SPONSORED

MEDI-CAL

INDIVIDUAL MARKET

5.12.8

17.818.8

9.2

5

10

15

20

25

30

35

As of March 2015, Covered California has approximately 1.3 million members who have active health insurance. California has also enrolled nearly 3 million more into Medi-Cal of whom over 2 million are newly eligible.

EMPLOYER

1.3

All Californians now benefit from insurance policy changes.

UNINSURED

From 2013 to 2015, the number of uninsured Californians has been reduced by almost half.1

1.5

subsidized, unsubsidizedand new Medi-CalCOVERED CALIFORNIA

12.4

1.5 million ineligible forCovered California dueto immigration status

Consumersin the individual market

(off-exchange) can get identical price and benefits as Covered

California enrollees

0.9

0

2013 2015

6

1.3MILLIONconsumers have active

health insurance as of March 2015

Covered California is now the second largest purchaser of health insurance in the state for those under age 65.

Covered California’s size gives it the clout to shape the health insurance market.

$6.5BILLION

estimate of fundscollected from

premiums in 2015

More than 500,000 Californians have benefitted fromcoverage through Covered California. Many of them now have either employer-basedcoverage or Medi-Cal.

1.8MILLIONconsumers served since

Covered California began offering

coverage

Covered California is Big and Having Big ImpactsIt is now one of the largest purchasers of health insurance in California and the nation.

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Native Hawaiianand other Pacific Islander <1%

Black/African-American 4%

American Indianand Alaska Native <1%

Other 3%

Mixed Race 3%

White34 %

Asian18%

Latino

37%

Second Open Enrollment Nov. 1, 2014 - Feb. 15, 2015

1 CalSIM version 1.91 Statewide Data Book 2015-2019 http://bit.ly/1Que1NV

2 Henry J. Kaiser Family Foundation. 2015. “Coverage Expansions and the Remaining Uninsured: A Look at California During Year One of ACA Implementation.” Menlo Park, CA.

An independent study conducted by the Kaiser Family Foundation2 confirmed that:

• Covered California enrollees are more racially diverse than the group of Californians with private coverage. 60 percent identify as a race/ethnicity other than white. Latinos make up 37 percent of the total.

Estimated subsidy-eligible population of the state developed by the University of California’s statistical model1:

38 34 21 5% % %%

LATINO WHITE ASIAN/PACIFIC ISLANDER

AFRICAN- AMERICAN

Enrollment data proves that our efforts to reach California’s diverse population is working

Covered California is Enrolling All Communities Across Our State

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2015AVERAGE RATEINCREASE OF

4.2%

Covered California Health Plan Offerings for 2015: Broad Choice, Local Options and Good Trend

9

Covered California Health Plan Offerings for 2016: Broader Choice, More Local Options and Better Trend

10

2016AVERAGE RATEINCREASE OF

4.0%

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A few notes on monthly premium costs:

77 percent pay less than $150 per month per individual.

More than 120,000 enrollees pay less than$10 per month per individual.

25 percent of enrollees in an Enhanced Silver94

plan pay less than $25 per month per individual, while more than half pay less than $50.

In addition, these individuals pay only $3 for doctor visits.

Covered California’s Standard Benefit Design:

• Bronze — three office visits and lab work, not subject to deductible.

• Silver, Gold, Platinum — no deductibles on any outpatient services.

Silver 11%

128,000

ENHANCED

Silver73 11%

128,000

Bronze 24%

280,000

Platinum 3%

40,000

Gold 4%

52,000

ENHANCED

Silver87 30%

357,000ENHANCED

Silver94 17%

199,000

2015 Subsidized Enrollmentby Metal Tier

Source: Covered California enrollment data as of April 2015, including only subsidized enrollees who have paid for coverage.

More than 69 percent of Covered California subsidy-eligible enrollees selected a Silver Plan — which have NO deductibles for any out-patient services; 58 percent of all subsidy eligible enrollees qualified for an "Enhanced Silver", which means even lower out-of-pocket costs when accessing services.

Covered California Enrollees Able to Choose BOTH Low Premium and Low Out-of-Pocket Designs

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By offering fewer, but standardized products, Covered California offers better options, creating more value for consumers.

The number of health insurance products available at the Silver tier:

Los Angeles

7Silver plans offeredthrough 6 carriers

Denver

35Silver plans offeredthrough 8 carriers

Miami

33Silver plans offeredthrough 6 carriers

0 15 5

The Value of Standard Benefit Design: A Tale of Three Cities

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The number of silver products requiring full deductible to be met before outpatient care is covered:

Products offered in states not actively purchasing results in confusing product options that could easily lead consumers to make poor choices, either by picking a product that’s too expensive or has the wrong benefit package.

The Impact of Standard Benefit Design On Consumers’ Product Choices: A Tale of Three Cities

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Los Angeles Denver MiamiPremium Range (Pre-APTC): $205-$264 per month

Premium Range (Pre-APTC): $183-$366 per month

Premium Range (Pre-APTC): $243-$466 per month

Premium Assistance:$23 per month

Premium Assistance$0 per month

Premium Assistance: $36 per month

Deductible: $2,000 medical deductible $250 brand drug deductible

Deductible: $0-$5,000Additional details vary by plans

Deductible: $0-$5,750Additional details vary by plans

Out of Pocket Maximum: $6,250

Out of Pocket Maximum: $3,650-$6,600

Out of Pocket Maximum: $4,000-$6,600

Covered California compared plans in three different states for a 30 y.o making $30,000 per year seeking a Silver plan.

The Impact of Standard Benefit Design On Consumers’ Product Choices: A Tale of Three Cities

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Los Angeles – HealthNet Silver Denver – HealthOP Bison Flex Ambetter Balanced Care 2

Premium: $181 per month after tax credit of $23

Premium:$183 per month (no tax credits available)

Premium: $207 per month after tax credit of $36

Benefits NOT subject to deductible- All Outpatient Care Visits- X-Rays- Lab Tests- Generic Medication

Benefits NOT subject to deductible- Generic Medication

Benefits NOT subject to deductible- All Outpatient Care Visits- Imaging- X-Rays

Benefits subject to deductible- Imaging- Preferred Medication- In-patient hospital care

Benefits subject to deductible- All Outpatient Care Visits- Imaging- X-Rays- In-Patient Hospital Care

Benefits subject to deductible- All inpatient hospital services- Laboratory Services

Deductible:$2,000 medical$250 medication

Deductible:$3,900 medical and medication

Deductible$5,000

Maximum Out-of-Pocket:$6,250

Maximum Out-of-Pocker$6,600

Maximum Out-of-Pocket:$5,000

Covered California compared plans in three different states for a 30 y.o making $30,000 per year seeking a Silver plan.

The Impact of Standard Benefit Design On Consumers’ Product Choices: A Tale of Three Cities

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Not having Standard Benefit Design results in too many plan options and varying benefits that could make a consumer choose what looks like is the “cheapest plan,” but may not offer affordable services when utilized.

California Denver Miami

California 2015 Enrollment Colorado 2015 Enrollment Florida 2015 Enrollment

Bronze 42%

Bronze 25%

Platinum <1%

Gold 10%

Platinum 5%

Silver 65%

Bronze 15%

Platinum 4%

Gold 3%

Silver 76%

Silver 47%

Gold 5%

A Kaiser Family Foundation independent survey of consumer released in May 2015 reported on services through the Fall of 2014.

• 91 percent of Covered California enrollees reported it was “very” or “somewhat easy” to travel to their usual source of care, which matches the Other Private markets (Figure 19).

• 59 percent of Covered California enrollees had a check-up or preventive care visit by the Fall of 2014, which is nearly twice the rate for preventive visits amongst the uninsured (Figure 20). This is not significantly statistically different from other private market, and if extrapolated over time, this means more than 800,000 preventive visits have been provided through Covered California since Jan. 2014.

Source: Henry J. Kaiser Family Foundation. 2015. “Coverage Expansions and the Remaining Uninsured:

A Look at California During Year One of ACA Implementation.” Menlo Park, CA.

Health Care Access is Improving Dramatically for both Covered California and Medi-Cal Enrollees

Figure 19

82% 82%85%

89%*83%

91%* 91%*

NOTES: Includes adults ages 19-64. “Previously Insured” includes people who were insured as of interview date and have been insured since before January 2014; some

of these people may have switched coverage type. “Newly Insured” include people who were insured as of int erview date and gained coverage since January 2014.

“Uninsured” includes people who lacked coverage as of the interview date. “Usual Source o f Care” does not include care received at an emergency department.

*Significantly di erent from Uninsured at the p<0.05 level.ffSOURCE: 2014 Kaiser Survey of Low-Income Americans and the ACA.

Ease of Travel to Usual Source of Care Among Nonelderly Adults in California, by Insurance Coverage and Type in Fall 2014

Share reporting it was “very” or “somewhat easy” to travel to their usual source of care:

Uninsured Newly insured Previously insured

Uninsured Newly insured Previously insured

Previously insured

45%

58%*

45%

31%

47%*

66%*

31%

58%* 59%*

65%*

Figure 20

Use of Medical Services Among Nonelderly Adults in California, by Insurance Coverage and Type in Fall 2014

80%*77%*

71%*

78%*

NOTES: Includes adults ages 19-64. “Previously Insured” includes people who were insured as of interview date and have been insured since before January 2014; some

of these people may have switched coverage type. “Newly Insured” include people who were insured as of interview date and gained coverage since January 2014.

“Uninsured” includes people who lacked coverage as of the interview date. *Significantly di erent from Uninsured at the p<0.05 level.ffSOURCE: 2014 Kaiser Survey of Low-Income Americans and the ACA.

Used any medical services Had check-up or preventive care visit

Uninsured Newly insured Previously insured

Uninsured Newly insured Previously insured

Previously insured

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Covered California: Assuring Contracted Plans Promote Quality Care

18http://www.coveredca.com/PDFs/7-27-CoveredCA-2016PlanRates-prelim.pdf

Covered California is Building the Platform to Improve the Delivery of Care

For Covered California, being an “active purchaser” is about far more than just selecting plans and negotiating for the best possible rates. The negotiations and contract requirements are specifically designed to promote the triple aim at the delivery of care: better quality, promoting health and wellness and lowering costs.

Covered California recognizes that promoting better care delivery and reducing disparities requires coordinated action across large public and private purchasers and the plans they contract with.

The following link shows the contract terms all Covered California plans must agree to. Specifically, Attachment 7 addresses quality, network management and delivery system standards: http://hbex.coveredca.com/solicitations/QHP/library/QHPModelContractAttachments-Final.pdf.

Based on these, plans have requirements to:

• Participate in payment reform and quality collaboratives

• Develop programs that chart progress in reducing health disparities in meaningful and measurable ways.

• Have a process that determines, monitors and records the health status of consumers over the age of 18 and use the information to promote better health among consumers.

• Encourage consumers to use their insurance and seek health and wellness services.

• Help consumers select a primary care physician, find a federally-qualified clinic or team-based center (medical home) to coordinate all healthand wellness needs.

• Actively help consumers with chronic conditions manage their illness through providers specializing in coordinated care. Conditions could include hypertension, diabetes, asthma and heart disease.

• Provide and update information showing total costs and out-of-pocket costs for the most-used services and highest-cost services.

Covered California is assessing health plans efforts in these areas and will be “raising the bar” in coming years.

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MARKETPLACE FUNCTIONS GEOGRAPHIC FOCUS

Effectively Reach Consumers: Marketing, Outreach and Retention• reach potential consumers and support retention• convey value of subsidies and support informed choice• support enrollment and education by agents, navigators

and others

Location Specific• specific to state or locale, but

opportunities for coordination among states that share media markets

Offer Affordable Products: Plan Selection, Contracting and Oversight• offer quality plans that represent a good value• leverage purchasing power to help consumers• promote cosnumer-friendly benefit design and delivery

system reform

Location Specific• very specific to each state

Conduct Enrollment and Plan Selection (website and IT)• determine subsidy eligibility and conduct enrollment• health plan “choice architecture”• data interfaces with health plans

Not Location Specific• but requires significant state-

specific integration with Medicaid programs

Provide Good Customer Service• phone and online assistance• problem resolution

Not Location Specific• but training required relative

to specific state law and plans

Covered California does all these major functions, but some require more “geographic focus” than others. States have many options for sharing or relying on the federal exchange, and each other, to support the implementation of these functions.

State Options for Administering Core Functions of a Health Care Marketplace

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Information for consumersCoveredCA.com

Information on exchange-related activitieshbex.CoveredCA.com

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